If a company fails to make an adjusting entry to record supplies expense then
A) owner's equity will be understated.
B) expense will be understated.
C) assets will be understated.
D) net income will be understated.

Question

Quizplus · Accepted Answer

Failing to record supplies expense means the expense account is too low, which in turn means that net income (revenues minus expenses) is overstated because expenses are understated.

If a Company Fails to Make an Adjusting Entry to Record